Savingforcollege.com Rankings Show USAA and Louisiana as Best-Performing 529 Plans

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Savingforcollege.com has released its Q4 2010 report ranking the 1-, 3-, and 5-year investment performance of all Section 529 college-savings plans. Nevada's USAA College Savings Plan and Louisiana's START 529 Plan topped the rankings for direct-sold 529 plans. Savingforcollege.com's 529 Performance Rankings are updated every quarter and provide an apples-to-apples performance comparison of these investment programs.

Nevada's USAA College Savings Plan was first among all direct-sold 529 plans in three- and five-year investment performance as of December 31, 2010, according to Savingforcollege.com's newly-released 529 Composite Performance Rankings. The college-savings program uses USAA mutual funds in its single aged-based and seven asset-allocation investment options.

Louisiana's START 529 plan placed first in the one-year performance category. Available only to residents of the Bayou State, Louisiana's plan is known for its low costs and has the distinction of being the only 529 savings program that does not layer a management or administrative fee on top of the underlying fund expenses.

Among direct-sold 529 plans without any state residency requirements, top-10 performers across all measuring periods included plans managed by American Century (Kansas), TIAA-CREF (Michigan), and T. Rowe Price (Alaska/Maryland).

"USAA members participating in their own plan should be pleased," remarked Joseph Hurley, founder of Savingforcollege.com and CEO of its parent company JFH Innovative LLC. "Although the program has relatively few investment options, the ones they do offer have been performing well."

In producing its rankings, Savingforcollege.com compared the reported investment performance of a subset of portfolios from the 529 savings plans in every state. Portfolios were selected based on their mix of stocks, bonds, and money-market funds, aiming for an apples-to-apples comparison in seven different asset-allocation categories.

"Overall, the year 2010 was a another strong one for 529 plans," commented Hurley. "The S&P 500 returned 15.06 percent for the year, but the median portfolio in our 100%-equity grouping produced a 15.4 percent return. Many of the more-conservative options also did well against their benchmarks."

Hurley cautions, however, that past performance does not guarantee future returns, and that a plan currently ranking high will not necessarily outperform its peers in the future. "Our rankings have shown significant movement among competing plans over the years," he said.

The full reports showing one-year and three-year rankings for all direct-sold 529 plans can be viewed at http://www.savingforcollege.com/articles/2010-plan-performance-rankings-q4. Savingforcollege.com also produces rankings for advisor-sold 529 plans along with all underlying investment data, available through a subscription. Rankings are updated each quarter.

One-year Composite Performance Rankings (49 plans ranked)

Ranking                 Plan                                                            

1                         Louisiana: START (Mostly Vanguard funds)                                                    
2                         Alaska: U. of Alaska College Savings (T. Rowe Price funds)
3                         Alaska: T. Rowe Price College Savings (T. Rowe Price funds)
4                         Michigan: MESP (TIAA-CREF funds)
5                         Virginia: VESP (Vanguard and others)
6                         South Dakota: CollegeAccess (Multiple fund families)
7                         Nevada: USAA 529 (USAA funds)
8                         North Carolina: National College Savings (Mostly Vanguard funds)
9                         West Virginia: SMART529 Select (Dimensional (DFA) funds)
10                     Utah: UESP (Mostly Vanguard funds)

Three-year Composite Performance Rankings (47 plans ranked)

Ranking                 Plan
1                         Nevada: USAA 529 (USAA funds)
2                         Kansas: Schwab 529 (Multiple fund families)
3                         Florida: FL College Investment    (Multiple money managers)
4                         Wisconsin: EdVest (Mostly Wells Fargo funds)
5                         Michigan: MESP (TIAA-CREF funds)
6                         West Virginia: SMART529 Select (Dimensional (DFA) funds
7                         Nevada: Vanguard 529 (Vanguard funds)
8                         Utah: UESP (Mostly Vanguard funds)
9                         South Carolina: Future Scholar (Columbia Funds)
10                        Maryland: MD College Investment (T. Rowe Price funds)

Five-year Composite Performance Rankings (37 plans ranked)

Ranking                 Plan

1                         Nevada: USAA 529 (USAA funds)
2                         Kansas: Schwab 529 (Multiple fund families)
3                         Michigan: MESP (TIAA-CREF funds)
4                         Louisiana: START (Mostly Vanguard funds)
5                         Alaska: U. of Alaska College Savings (T. Rowe Price funds)
6                         Virginia: VEST (Vanguard and others)
7                         Maryland: MD College Investment (T. Rowe Price funds)
8                         South Carolina: Future Scholar     (Columbia funds)
9                         Alaska: T. Rowe Price College Savings (T. Rowe Price funds)
10                        Wisconsin: EdVest (Mostly Wells Fargo funds)

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Marie Osypian
JFH Innovative, LLC
585 286 5426 ext. 12
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